Updates:


The following providers and facilities remain a concern, but Blue Shield is actively addressing these issues:


Purpose of Report

The cost of out-of-network (OON) facility claims is significantly higher than the contracted rates for Blue Shield of California (BSC) network ambulatory surgery centers (ASC). The purpose of this report is to assist the client and BSC in identifying opportunities for cutting costs.

OON claims, on average, cost an additional $15,300 per claim. In a given 12-month period, there are approximately 675 paid OON-facility claims, so there is a tremendous potential for savings. It continues to be an important endeavor to enforce in-network referrals.

Potential annual savings if all OON facility claims were paid at the average BSC facility rate

$10,470,000

The bulk of the OON-facility use comes from a small group of BSC surgeons which we will be identifying in this report. OON-facility claims represent about 12.3% of paid claims but account for 56.1% of spending:


Over the previous 12 months, OON claims represented 12.3% of paid claims . . .

 

. . . but accounted for 56.1% of spending for ASCs.


Recently-Paid Claims

To track recent payments, the following scatterplot displays paid OON-facility claims from the last 12 months (by date of service). Hover over the points to view details of each claim, such as payment amount. The blue dots represent claim payments that appeared in a previous report, and the orange dots represent claim payments that are new to this quarter.



The above scatterplot shows a variability in facility costs. However, despite the variability of facility charges, the majority of the payments are between $10,000 and $12,000. A contributing factor to the allowed amount is the provision of the insurance plan, referred to as the Basic Benefit. Under this provision, payment is provided using the plan’s Schedule of Allowances. Effective October 1, 2021, that amount is $11,085.09.

However, if the charge amount and the MAC rate both exceed the Basic Benefit allowance, additional payment may be allotted under the Major Medical Benefit, which is why some claims pay more than the Basic Benefit.


Blue Shield Network Provider Terminations and Newly Contracted Facilities

Blue Shield has terminated or set termination dates for a number surgeons who repeatedly appeared on this report for OON referrals. These providers have failed to utilize in-network facilities despite having received multiple requests to do so. The table below lists these providers, their effective termination dates, total referrals for the prior 12 months, and total costs associated with these referrals.

Prior 12 Months*
Surgeon Termination Date Total OON Referrals Total Billed OON Total Paid OON
Bao Nguyen 06/01/2020 97 $3,231,948 $1,029,853
Ramin Roohipour 02/21/2020 52 $4,467,342 $1,222,178
Rifaat Salem 04/15/2019 43 $677,650 $470,484
Sutha Sachar 04/15/2019 28 $478,461 $194,628
David Wu 05/22/2022 23 $340,980 $96,240
David Kim 09/01/2019 15 $226,116 $153,943
Garrett Matsunaga 05/22/2021 13 $575,890 $197,921
Shelby Morrisroe 05/22/2021 10 $324,389 $164,389
Kartik Ananth 03/01/2020 8 $207,200 $77,275
Houshmand Naim 12/27/2021 8 $543,111 $100,053
George El-Khoury 04/15/2019 7 $191,443 $27,222
Hyderali Mukadam 04/01/2020 7 $241,850 $53,136
Raymond Bautista 09/01/2019 6 $232,000 $73,337
Miriam Mackovic-Basic 11/08/2020 6 $480,650 $80,457
Kambiz Dardashti 05/22/2021 0 $0 $0
Robert Webman 01/11/2021 0 $0 $0
* If provider was termed before last quarter, then the totals are based on the 12 months prior to term date.
Provider termed for excessive use of OON ASCs but all activity ceased 12 months prior to term date.


Most of the termination dates are at the end of the providers’ contract dates which explains why some are relatively far in the future - as late as May 2022. While there are grounds for immediate termination for many providers, Blue Shield’s legal counsel believes that should any of them pursue litigation to avoid termination, they could forestall their removal from the network far past their contract termination date. The best course of action is simply not to renew contracts with these providers.


Turning to facilities, Blue Shield has successfully brought five ASCs into their network. The addition of these facilities to Blue Shield’s network is significant. Their out-of-network costs were substantial:
12 Months Prior to Contract Date
Facility Contract Date Total OON Referrals Total Billed OON Total Paid OON
Pacific Coast Surgical Center 07/01/2019 82 $3,807,195 $1,120,528
Beach District Surgery Center 08/01/2019 55 $1,171,665 $685,360
Complete Care Surgery Center 11/01/2020 25 $1,426,570 $322,844
Beach Cities Orthopedics Surgery Center 12/15/2018 16 $1,098,969 $257,647
Pacific West Surgery Center 03/01/2020 0 $0 $0


Potential Reduction in Costs

The potential reduction in costs that may come from excluding or redirecting the referral behavior of the above providers as well as bringing facilities in-network is significant. Viewed over a quarterly basis, we see that the proportion of out-of-network facility use has been decreasing in relation to BSC facility use:


Similarly, the proportion of spending for out-of-network spending is also decreasing:


Recall the vast difference between the cost of BSC and out-of-network facilities. On average, a typical out-of-network facility claim reimburses at a rate of six to seven times more than a BSC facility claim. This explains how a minority of claims can be the source of the majority of the costs.

(Be aware that the steep drop in the last quarter is not an accurate representation of the actual distribution. Out-of-network claims require additional ICM and CHC review, so approvals generally take longer than BSC claims.)


Using facility claims for surgeries in 2018, if every patient of these excluded providers or providers scheduled for termination in 2021 had used an in-network facility, the annual reduction in costs would be:

Paid OON Claims
Terminated Providers
Average OON Cost
Terminated Providers
Average BSC Cost Reduction in Costs
from Removing Providers
275 × ( $12,912 - $2,516 ) = $2,858,900


Using the same timeframe, the potential reduction in costs from adding five more facilities to Blue Shield’s network is:

Paid OON Claims
New BSC Facilities
Average OON Cost
New BSC Facilities
Average BSC Cost Reduction in Costs
from Adding New Facilities
175 × ( $15,161 - $2,516 ) = $2,212,875


Combining those two amounts (accounting for overlap of excluded providers who used newly-contracted facilities), the reduction in costs could potentially be:

Reduction in Costs
Terminated Providers
Reduction in Costs
New BSC Facilities
Total Potential
Reduction in Costs
$2,858,900 + $2,212,875 = $5,071,775


The entire extent of the estimated reduction in costs will not be fully realized for some time to come because a number of physicians will not be removed from Blue Shield’s network until late 2021.

We can, however, see real reductions when examining four of the ASCs that Blue Shield has brought into their network. What follows are scatter plots of facility payments for those facilities, before and after their network status change:



By comparing the average cost for each facility before and after joining Blue Shield’s network, we can see an enormous difference:


Three of the facilities have increased the number of procedures performed since joining Blue Shield’s network, so it appears that the estimated annual reduction in costs of $2,212,875 is supported by the available data.


Individual Provider Referral Data

The tables in the three tabs below show overall use of OON facilities by BSC surgeons. The names highlighted in red are of focused concern because they frequently refer out-of-network but are not scheduled for termination or do not refer to newly-contracted ASCs. The provider names with a single asterisk indicate those service providers who are terminated or scheduled for termination. The facilities with two asterisks are newly-contracted ASCs.

These tables have been created for Blue Shield’s use in determining which providers would generate the greatest savings if they were to reduce OON-facility use and are thus intended to assist Blue Shield in its prioritization of outreach efforts.

Last Six Months

By default, these lists are sorted by BSC surgeons who use OON facilities the most. Click on the column names to re-sort list.




Last Twelve Months




Since 2017




Most Frequent Users of OON Services

We have seen through the data how a large proportion of OON-facility costs is associated with a handful of surgeons. In this section we are providing data for individual providers most frequently referring to OON facilities and providers who have been indicated by BSC to have received an outreach letter. This correspondence reminds the physician of his or her contractual obligations to rely on in-network services and asks the provider to sign the letter acknowledging this agreement.


Garrett Matsunaga





Comments

  • 05/30/2019: Letter sent.
  • 05/22/2021: Effective termination date.
  • 10/01/2021: Blue Shield could not terminate Garrett Matsunaga because he practices out of the offices of Skyline Urology, an in-network group in good standing. This is also the same situation for Shelby Morrisroe. Blue Shield has informed the office that their continued use of out-of-network facilities jeopardizes the standing of the entire group. We will closely monitor the activities of these two physicians.



Shelby Morrisroe





Comments

  • 04/12/2018: Letter sent.
  • 07/24/2018: Letter sent.
  • 05/30/2019: Letter sent.
  • 05/22/2021: Effective termination date.
  • 10/01/2021: Blue Shield could not terminate Shelby Morrisroe because she practices out of the offices of Skyline Urology, an in-network group in good standing. This is also the same situation for Garrett Matsunaga. Blue Shield has informed the office that their continued use of out-of-network facilities jeopardizes the standing of the entire group. We will closely monitor the activities of these two physicians.





Houshmand Naim

Houshmand Naim’s name sometimes appears as H. Joseph Naim.



Comments

  • 05/24/2018: Letter sent.
  • 05/30/2019: Letter sent.
  • 12/27/2021: Effective termination date.





Rifaat Salem





Comments:

  • 04/15/2019: Scheduled date for termination.
  • 10/01/2021: Dr. Salem has been able to continue to submit claims as an in-network provider because he practices out of the Pacific Reproductive Center, which is a group remains in good standing. Blue Shield has informed the office that their in-network status will be in jeopardy should he continue to refer out-of-network.





David Wu





Comments:

  • 09/24/2018: Letter sent.
  • 11/05/2018: Letter sent.
  • 05/30/2019: Letter sent.
  • 05/22/2022: Effective termination date.





David Kim





Comments:

  • 03/17/2017: Letter sent.
  • 04/12/2018: Letter sent.
  • 09/24/2018: Letter sent.
  • 09/01/2019: Effective termination date (rescinded).
  • Dr. Kim had been utilizing a BSC facility for some time before returning to the out-of-network ASC, Prime Surgical Center of Torrace. Since June 2020, he has almost relied exclusively on this facility. Because Blue Shield is in negotiations with Prime Surgical Center of Torrance, any decisions on his in-network status remains on hold.





Stephen Nuccion





Comments:

  • Stephen Nuccion refers patients to Prime Surgical Center of Torrance but has a practice with the Torrance Memorial Physician Network (TMPN) which is within Blue Shield’s network.
  • 12/17/2017: Letter sent.
  • 08/06/2018: Letter sent.
  • 10/09/2018: Terry Runzler, Sr Director of Billing and Finance at Torrance Memorial, explained in an email on Dr. Nuccion’s behalf:
    • All patients who are referred to OON facilities by Dr. Nuccion are notified verbally and by email that the facility is OON and that the patient may be responsible for out-of-pocket costs; a third notification comes from the OON facility which requires the patient to acknowledge the facility’s network status.
    • Per provider, staying in-network is not always possible: “Dr. Nuccion’s patient volume is large, and access is also a factor in scheduling some of these surgeries.”
    • Per provider, patients are given the option of staying in-network: “As an FYI, in the event the patient wants to go to the hospital for financial reasons, the surgery would be scheduled there.”
  • Though Dr. Nuccion’s office says that an in-network facility is an option for patients, there are no instances, since 2017, of Dr. Nuccion referring in-network.
  • 07/01/2020: Dr. Nuccion will be terminated without cause, effective this date.
  • 10/01/2021: Because of Prime Surgical Center of Torrance is in negotiations with Blue Shield to join their network, Dr. Nucccion’s termination has been rescinded for the time being.





Peter Borden





  • 05/30/2019: Letter sent.
  • 02/01/2020: Letter sent.
  • 06/01/2020: Blue Shield repors that Dr. Borden had provided assurances via email he will no longer use OON facilities.
  • After having gone eight months without using an out-of-network ASC, Dr. Borden has returned to using SAS Surgery Center with some frequency.





Payam Daneshrad





Comments

  • 05/30/2019: Letter sent.
  • 11/30/2021: Letter to be sent by this date.





Saleem Desai





Comments

  • 11/01/2019: Letter sent.
  • 12/26/2019: Letter sent.





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Behnam Kashanchi





Comments

  • 11/01/2019: Letter sent.
  • 11/30/2021: Letter to be sent by this date.





Timothy Lesser





Comments

  • 05/30/2019: Letter sent.
  • 03/09/2020: Letter sent.





Marc Rosenthal





Comments

  • 03/09/2020: Letter sent.





Mona Tahilramaney





Comments

  • 03/09/2020: Letter sent.





Kashyap Trivedi





Comments:

  • Dr. Kashyap Trivedi has an alternated between using Memorial Care Outpatient Surgical Center Long Beach, an in-network facility, and Prime Surgical Center of Newport Beach, an out-of-network facility. We will continue to monitor his activity.





Nazih Haddad





Comments:

  • Dr. Nazih Haddad has regularly referred patients to Great Life Specialty Center, which is located in Torrance, CA. Because Blue Shield has extensive coverage in the area, the network team does not believe it is necessary at this time to add the facility to their network.
  • 07/23/2020: Letter sent.
  • 09/01/2020: Letter sent.
  • 11/30/2021: Letter to be sent by this date.





Joseph Moza





Comments:

  • Dr. Joseph Moza has regularly referred patients to Great Life Specialty Center, which is located in Torrance, CA. Because Blue Shield has extensive coverage in the area, the network team does not believe it is necessary at this time to add the facility to their network.
  • 07/23/2020: Letter sent.
  • 09/01/2020: Letter sent.





Karapet Dermendjian





Comments:

  • Dr. Dermendjian’s taxonomy lists him as an anesthesiologist, but medical records indicate that he is the attending surgeon.
  • 11/30/2021: Letter to be sent by this date.





Hossein Najafi





Comments:

  • Since at least 2018, Dr. Hossein Najafi has been referring to the out-of-network facility, San Pedro Surgical Center. His referrals have not been frequent enough to draw attention until the end of 2020. We will continue to monitor his activity.
  • 11/30/2021: Letter to be sent by this date.





Robert Joseph









OON Facility Totals

Without Excluded Providers

The following table compiles the data for OON facilities most-frequently used by BSC surgeons, but it excludes providers who have received termination notices as well as facilities that are entering Blue Shield’s network.

This table has been created for Blue Shield’s use in determining which facilities would generate the greatest savings if brought in-network and is thus intended to assist Blue Shield in its prioritization of outreach efforts.





Overall

The following table compiles the data for OON facilities most-frequently used by all BSC surgeons as well as newly-contracted ASCs. It includes the surgeons who have received termination notices. It is limited to dates of service within the last 12 months.




Data Used for Report

What follows is a record of all out-of-network facility claims since 2018, by date of service. Some things to note:

  • If the Surgeon name is “Unknown”, then the facility claim did not report the referring surgeon.
  • If the Surgeon Network or Surgeon TIN field is “Unknown”, then it means that a professional claim associated with the reported surgeon was not found. When possible, the surgeon’s network is inferred based on other submitted claims.




Conclusion

Of all the areas of concern in this report, Blue Shield is addressing all but one of them. The most frequently-used OON ASC, Prime Surgical Center of Torrance, is in negotiations with Blue Shield. Individual physicians who have continued to refer out-of-network have received or will receive a letter by November 2021.

The one provider who we recommend contacting is Peter Borden. Blue Shield has sent letters to him in the past for utilizing the OON ASC SAS Surgery Center. In June 2020, he offered assurances that he would no longer refer out-of-network. Yet since February 2021 he has returned to SAS Surgery Center, using it at least 10 times since then.